How VIC real estate contracts are exchanged

Buying property in Victoria works differently from other states and territories, and understanding this process can save you from costly mistakes.

The following is some general information about the Victorian contract exchange process which you may not be familiar with if you haven't purchased a property in Victoria before or recently.


1. Documents required to sell property

In Victoria, there are two documents that must be provided to a buyer before they make an offer to purchase property: the contract of sale and the section 32 vendor statement.

Contract of sale

The contract of sale can be drafted by a legal professional and this may include the drafting and inclusion of bespoke special conditions.

Alternatively, a real estate agent may fill in (but not draft) a contract prepared by a legal professional or a contract approved by the Victorian Legal Services Commission or other professional association. However, real estate agents are prohibited from drafting bespoke special conditions, so you should seek advice from a legal professional if you require these.

While there is no legally mandated standard form Contract of Sale in Victoria, the REIV Contract of Sale of Real Estate is used most often.

Section 32 vendor statement

The section 32 vendor statement must be prepared by a legal professional and it must comply with the disclosure requirements set out in the Sale of Land Act 1962 (VIC).

Examples of information and documents that must be disclosed in the section 32 vendor statement include, but are not limited to, financial matters, insurance details, building permits, connected/non-connected services and evidence of title.

The failure to supply mandatory information or the failure to supply the vendor statement entirely, or the supply of false or incomplete information constitutes an offence for which the seller may be criminally liable and gives the buyer the right to terminate the contract prior to settlement.


2. Contract listing, negotiating offer terms, and exchange

A property can be listed for sale without a contract or section 32 vendor statement however well prepared sellers and their agents often do have these available when the property is listed for sale so they can transact quickly when an offer is made by private treaty, or made available well before a property is sold at auction.

Buyers should obtain legal advice on the contract of sale before submitting an offer and the team at lawlab can complete a contract review to help you buy securely.

It is common industry practice in Victoria for the seller’s legal representative to include special conditions that favour the seller and for the buyer’s legal representative to request amendments to some of these where they may be unreasonable to the buyer.

Once a buyer and seller have agreed to the sale terms through the real estate agent and buyer’s agent (where applicable), the real estate agent may populate the contract of sale, or a sales advice may be provided to the seller’s legal representative so they can do so.

Once the buyer and seller have signed the contract, in what is generally referred to in Australia as a contract exchange, it becomes legally binding.


FAQs about VIC contracts of sale

Q1: Is there a cooling off period in Victoria?
Yes, in most private treaty sales. The cooling off period expires on the date that is 3 clear business days after the buyer has signed the contract. Whether or not the seller has signed the contract does not impact the cooling off period. It’s important to note that corporate buyers are not entitled to a cooling off period in Victoria.

Q2: Can I make my contract subject to finance in VIC?
Yes. Finance clauses are standard and widely accepted in Victoria (other than for sales by auction). To terminate under the finance clause, you must provide proof that your loan has not been approved.

Q3: Can I make my contract subject to building and pest inspections in VIC?
Yes. Building and pest clauses are also standard and widely accepted in Victoria (other than for sales by auction). To terminate under the building and/or pest clause, the report must disclose a major structural defect or major active pest infestation.

Q4: Is there a fee for terminating the contract under cooling off?
Yes. If you terminate the contract under cooling off, you must pay the seller a termination fee of $100 or 0.2% of the purchase price (whichever is greater).

Q5: Who handles the contract signing process?
Generally, either the real estate agent or legal representatives will handle the contract signing process. We recommend you obtain legal advice on the contract before signing.

Q6: When should I send documents to my legal representative?
Immediately, so they can be reviewed (and, if necessary, any changes negotiated and made) before you sign.

Rikki Rozynski

Rikki is a solicitor at Lawlab. She has a double degree in Law and Arts, majoring in Politics and Policy Studies. She has experience advising on residential and commercial property transactions and is committed to providing reliable advice and positive outcomes for clients. Outside of work, she enjoys spending quality time with family and friends, walking her dogs, and going to gym.